Purpose: The purpose of this research work is to examine the financial effect of supply chain disruptions (SCDs) caused by coronavirus disease 2019 (COVID-19) and how the magnitude of such effects depends on event time and space that may moderate the signaling environment for shareholder behaviors during the pandemic. Design/methodology/approach: This study analyses a sample of 206 SCD events attributed to COVID-19 made by 145 publicly traded firms headquartered in 21 countries for a period between 2020 and 2021. Change in shareholder value is estimated by employing a multi-country event study, followed by estimating the differential effect of SCDs due to the pandemic by event time and space. Findings: On average, SCDs due to pandemic decrease shareholder value by −2.16%, which is similar to that of pre-pandemic SCDs (88 events for 2018–2019). This negative market reaction remains unchanged regardless of whether stringency measures of the firm's country become more severe. Supply-side disruptions like shutdowns result in a more negative stock market reaction than demand-side disruptions like price hikes. To shareholder value, firm's upstream or downstream position does not matter, but supply chain complexity serves as a positive signal. Originality/value: This study provides the first empirical evidence on the financial impact of SCDs induced by COVID-19. Combining with signaling theory and event system theory, this study provides a new boundary condition that explains the impact mechanism of SCDs caused by the pandemic.
|International Journal of Operations and Production Management
|Varhainen verkossa julkaisun päivämäärä
|24 lokak. 2022
|DOI - pysyväislinkit
|Julkaistu - 19 jouluk. 2022
|A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä
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Reports Summarize COVID-19 Study Results from Aalto University (Effects of Supply Chain Disruptions Due To Covid-19 On Shareholder Value)
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